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PETALING JAYA (Aug 11): The residential property sector in Kota Kinabalu is witnessing a gentle improvement, underpinned by a lack of new launches in the market, said property consultancy firm Knight Frank Malaysia in its Real Estate Highlights report.
“The options presented to buyers for new developments is finite and as a result projects launched in the first half of 2016 (1H2016) have been achieving healthy take-up rates, signifying that consumer sentiment is gaining traction from what some considered to be a challenging 2015. This is mainly because developers have responded to the market environment with smaller units and more affordable projects leading the way,” it said.
“Well priced, mid-range and affordable residential properties are expected to be well-received by the market as well as end-financiers,” Knight Frank Malaysia pointed out.
According to the report, Bukit Bantayan, the first condominium in the state, has achieved a 60% take-up rate to date.
Maya@Likas, a high-rise property that comprises three residential towers, has sold 60% of its units to date.
Knight Frank Malaysia said that property prices in Kota Kinabalu are expected to be sustained if there are no major changes to macroeconomic conditions and government policies.
Moreover, prices are likely to hold as Kota Kinabalu is the state capital and the administrative, commercial, education and tourism hub, and gateway into Sabah, it added.
The consultancy firm added that the secondary market will continue to generate more transactions given that launches are limited.
The market is currently facing challenges such as the general buyer’s sentiment, rising cost of construction and generally higher restrictions on loans.
Based on 1Q2016 property sales data by Napic, Sabah registered 1,595 transactions with a total value of RM820.9 million, a decrease of 27% and 49% in volume and value respectively against the same period last year, no thanks to the negative elements.
However, notwithstanding the drop in transaction volume and value, there has been no evidence of a drop in property prices.
“The overall property market is anticipated to see little change throughout 2016. Overall, good and developable land in sought-after locations will continue to be safe bets in the long term.”
Commercial office occupancy, however, may see some pressure towards the end of this year and early-2017 with the completion of new purpose built offices around the CBD fringe, Knight Frank Malaysia added.
On the other hand, retail rents may come under pressure on new completions, pitting more landlords against each other for the same tenants.
Recently, the completion of Imago Shopping Mall, Riverson Walk retail mall, retail space of Plaza Shell and Oceanus Shopping Mall drastically increased the amount of net retail space by roughly 1 million sq ft, bringing the net retail space to slightly over 5.8 million sq ft.
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